Economic Understandings SS4E1 a Explain opportunity costs and their relationship to New World exploration.

Basic Economics

Choices Cost You! We have to make economic choices every day. Some choices are easy because they’re not very expensive. Some choices are hard because they cost a lot of money. $ $ $ $ $ $

Choice 1 Eat school lunch or Bring your lunch from home Choice 2 Go to the movies or Rent a movie and watch it at home Choice 3 Ride the bus to school or Ride with your parents Examples of Daily Choices (Cost a small amount of money)

Choice 1 Buy a new car or Buy a used car Choice 2 Go on a trip or Save the money for college Choice 3 Go to work or Stay home and take care of the children Examples of Hard Choices (Involves a lot of money)

Opportunity Cost Opportunity cost is the value of what is given up when a choice is made. Every time you make a choice, you give up something else. You might decide to watch TV instead of washing a neighbor’s car to make some money. Your opportunity cost is the money you could have made washing the car!

Making Choices All choices require giving up something A farmer decides to grow corn instead of tomatoes. n His opportunity cost is the tomatoes he could have grown.

Making Choices All choices require giving up something A girl decides to babysit instead of going roller skating with her friends. n Her opportunity cost is the time she could have had with her friends roller skating.

Making Choices All choices require giving up something A dad decides to watch his son’s soccer game instead of earning some extra money fixing the neighbor’s computer. n His opportunity cost is the money he could have earned fixing the computer.

Oh Give Me a Choice (Tune: Home on the Range) Oh give me a choice, Oh, a difficult choice, And I’ll think about what I could use. I’ll have to decide, With my eyes open wide, What I’ll give up and what I will choose. Opportunity cost! It’s the thing you give up when you choose. It’s the price that is paid When a choice must be made. It’s the thing that I surely will lose. Let’s sing a song about choice and opportunity cost.

Leaders throughout history have had to make choices that involved opportunity cost. The kings and queens decided to spend money to search for a short cut to Asia. They paid for ships, supplies, and manpower. n Their opportunity cost was the money that could have be used for important things at home or to trade with other countries closer to home.

Oh, the kings and the queens Had to think about things And decide on the best thing to do. Let explorers set sail On exciting new trails Or keep all that money to use. Opportunity cost! It’s the thing they gave up when they chose To pay for the trips, For supplies and for ships And other expenses like those.